Rachel Reeves told an MP to “get real” and argued it is not reasonable to blame the Government for global volatility in markets, as she faced questions in the Commons over current turbulence.
The Chancellor was also criticised for her visit to China over the weekend, to which she responded by saying she was able to raise issues around human rights and the case of pro-democracy activist Jimmy Lai.
“As the Chancellor flew east, the pound plummeted south and Government debt rocketed north. Why? Because the markets don’t believe her plan for growth,” Conservative MP Dr Luke Evans said.
He added: “What is she going to say to the markets to make them believe she really does understand how to deliver growth in the UK?”
Ms Reeves replied: “There’s been a global volatility in markets. I don’t believe it reasonable to suggest that the reason why bond yields in the United States, in Germany and France have risen is because of decisions made by this Government. I think the honourable member opposite should just get real.”
SNP MP Dave Doogan said it was “beyond parody” that Ms Reeves would “go and throw herself at the mercy of the Chinese government, and come back with £600 million”.
Ms Reeves had previously said that agreements reached in Beijing and Shanghai, where she held discussions on trade and investment, would be worth £600 million to the UK over the next five years.
During the statement on Tuesday, the Angus and Perthshire Glens MP added: “When, not if, when her fiscal rules are breached, which will she do: increase borrowing, raise taxes, or cut spending?”
Ms Reeves replied: “I’ve been really clear, we will meet our fiscal rules that I set out in the budget, and we will do that at all times.”
Liberal Democrat Treasury spokeswoman Daisy Cooper described the £600 million as “small beer” and said the Chancellor “should not have gone to China unless there was a commitment that Jimmy Lai was going to be released”.
The Chancellor replied: “(Ms Cooper) says that £600 million isn’t worth it. Well, that’s £600 million of tangible benefit for British businesses trading overseas.
“I would have thought that the honourable lady would welcome enhanced trade and investment as a way to create more good jobs, paying decent wages in St Albans and indeed in all of our constituencies.
“Now (Ms Cooper) says we shouldn’t go to China because we need to raise difficult issues. Well, I’m not sure how the honourable lady thinks we’re going to raise difficult issues unless we engage with the second-biggest economy in the world.
“And because I went to China, I was able to raise issues around human rights, around forced labour, around Hong Kong and Jimmy Lai, and around the sanctioning of parliamentarians. You can’t raise those issues unless you are in the room.”
TUV MP Jim Allister (North Antrim) said: “Does she have any concerns about the Confucius Institute? The Chinese government-backed operation across the Unite Kingdom, did she raise any concerns about that? And in respect of Jimmy Lai, what answer did she get?”
Ms Reeves replied: “When our Prime Minister met with President Xi Jinping in Rio last year they agreed that one of the points of key engagement is that we’re able to make clear our concerns about a range of issues, but in a way that was private, and I’m not going to go into the details of that conversation.
“But with all of the Chinese officials that I met at the weekend, I raised these issues, and the problem is that the party opposite for all their chuntering, they didn’t raise these issues because they didn’t even engage.”
Conservative former leader Sir Iain Duncan Smith asked if the Government will allow import of goods “that contain any slave labour” from China.
Sir Iain, who is one of a number of MPs sanctioned by China, said: “The reality I want to put to her is that while she was away, (clothing company) Shein refused, point blank in a select committee to answer the question whether they had slave labour in their supply chains, but the Government wants them to register here in London.”
He added: “So can I ask the Chancellor to be clear now to the House about the Government’s position on slave labour?
“Can she explain whether this Government will allow any products or services or companies to align themselves here or import goods into here that contain any slave labour, no matter how important that import is?”
Ms Reeves replied: “This Government is committed to working with international partners and businesses to ensure that global supply chains are free from human and labour rights abuses, as (Sir Iain) knows under Section 54 of the Modern Slavery Act 2015, commercial businesses who operate in the UK and have a turnover of more than £36 million are required to report annually on the steps they have taken, and quite right so because modern slavery is absolutely abhorrent and this Government continues to take steps to deal with it.”
